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The Governor and Company of the Bank of Ireland 09 July 2008

Company News Alert

Significant decline in common stock price on 08 July 2008

Common BUY Direct

The commonaccess
stock ofto
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Governor Companyfree of charge
of the Bank at of Ireland) depreciated
of Ireland (Bank
significantly on 08 July 2008, in reflection of broad-based weakness in Irish equity markets, as well as
Stock http://www.iirgroup.com/researchoracle/viewreport/show/20252
investor concerns that deteriorating economic indicators in Ireland, the US and the UK will have a
negative impact on the bank’s financial performance, going forward. The bank has also stated that its
earnings are being negatively impacted by a slowdown in lending activity and volume growth,
Ticker: BKIR.I particularly in its retail business. However, although we expect to lower our estimates and target price
Target price: €13.27 when we revalue the bank in our next full update report, we believe that the recent significant decline
in the common stock price leaves the bank undervalued. Therefore, we maintain our BUY rating for
Current price: €4.51 the common stock.
Price change since
(56.6%)
last report: We will reassess our common stock rating for the Bank of Ireland in our next full update report.

ADR HOLD We no longer expect to revert to a 6-12 month investment horizon. Therefore, in view of the significant
negative currency impact anticipated over our 6-24 month horizon, we downgrade the ADR from a BUY
to a HOLD.
Ticker: IRE
Target price: US$66.34
Current price: US$29.42
Price change since We will reassess our ADR (1 ADR = 4 common shares) rating for the Bank of Ireland in our next full
(52.6%) update report.
last report:

Supervisor: Somnath Banerjee

Analyst: Paresh Jain
Editor: James Smithies
Global Research Director:
Satish Betadpur, CFA
Next news due:
1H 09 results, November 2008
Investment horizon - short term actionable trading strategies
This report addresses the needs of strategic investors with a long term investment horizon of 6-24 months. If this
report is provided to you by your broker under the Global Settlement, you may now also access (free of charge) the
short term trading outlook that we publish from time to time for this issuer, looking at the coming 5-30 days for
readers with a shorter trading horizon. These are available online only at www.researchoracle.com.
In our 1H 08 update report, dated 04 January 2008, we reiterated the Bank of Ireland common stock
a BUY on fundamental grounds, with a 6-24 month target price of €13.27 and a potential upside of
28%. The ADR was downgraded from a BUY to a HOLD, with a 6-24 month target price of US$66.34
and a potential upside of 7%. Since then, the common stock has depreciated by 56.6%.

The common stock fell by 10.9% on 08 July 2008, closing at a 52-week low of €4.51. This decline
primarily reflects negative investor reaction to deterioration in the Irish economy, weakness in the
housing market and broad-based weakness and volatility in global markets. The bank has stated that
its earnings are being negatively impacted by a slowdown in overall lending activity and volume growth,
particularly in its retail business. Furthermore, although the bank’s corporate lending has supported
overall growth in 1H 08, this trend is expected to weaken in 2H 08. In addition, the bank’s financial
strength rating has been downgraded, given the difficulty its customers are having with high interest
rates prevailing in the country at present.

In view of these factors, we expect to lower our estimates and target price when we revalue the bank
in our next full update report. However, we believe that the recent significant decline in the common
stock price has created an attractive investment opportunity. Therefore, we maintain our BUY rating.

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